Postie to launch new brands, tapping South African owner's supply chain

Wednesday 17th December 2014

Postie, the retail chain bought out of administration by South African retailer Pepkor, is betting on its new owner's economies of scale to boost sales in a "challenging" retail environment.

The international retail chain owner acquired Postie’s 64 stores, intellectual property, staff, head office and stock from the administrators in July for an undisclosed sum after the clothing retailer's lenders withdrew support as the company faced ongoing losses. The Auckland based retailer is making use of Pepkor's scale, launching two new brands, Schoolzone, a generic uniform brand, and Mango Dance, a ballet and jazz ballet clothing brand for kids, which sell in its Australian Best & Less chain.

“The biggest change has been access to the resources of a global retailer,” Richard Binns, Postie’s chief executive said. “What you see with Schoolzone and Mango Dance is the start of being able to tap into those resources and make full use of them. We had an introduction to the factories through Pepkor and we’ve hopped onto the back of Best & Less’s scale of production.

"It is a very big business with scale, so they have such a diverse offering that we can just tap into the bits that work for us and that’s going to be the real secret of our success going forward," Binns said.

Postie is the first New Zealand investment for Pepkor, which has been trading since 1965 and boasts more than 3,000 clothing, textile and footwear outlets across Australia, Africa and Eastern Europe with more than $4 billion in annual sales. It is entering a New Zealand market where retailers, particularly those in the rag trade, are squeezing margins to lure shoppers back with discounts and away from online, offshore retailers, who can undercut bricks and mortar retailers with minimal overheads and not charging GST.

"It is challenging and I wouldn’t pretend it isn’t, but we’re certainly making some progress," Binns said. “It is competitive but we’re actually tracking quite well. We’re pleased with the progress that we’re making and we had a very clear plan when we were bought by Pepkor back in July and we’re on track to deliver that so we’re happy with the way trade is looking at the moment."

The retailer appointed the administrators in June after unsuccessful attempts to recapitalise the business, including an attempt to find a buyer or a new cornerstone shareholder, after breaching its banking covenants in April. Postie was hit by supply chain disruptions in the summer of 2012 and 2013 after outsourcing its distribution centre to a third party, while shifting its headquarters to Auckland, where it anticipated growth.

BusinessDesk.co.nz

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